THIS invention relates to a method of personal financial planning.
Current methods of financial and retirement planning commonly take into account a subject's assets, liabilities, income and expenditure in order to establish the subject's current financial position. An attempt is then made to project the subject's future financial requirements, and if sufficient capital is not available to accommodate these requirements, suggestions are made as to how the necessary capital can be provided.
There are, however, a multiplicity of variables which influence such projections, including variations in the inflation rate, applicable tax rates, and variations in income and expenditure, inter alia, as well as the great number of possible choices which the subject can make in terms of his or her lifestyle and likely future expenses (for example, the purchase of a holiday home or a new vehicle). If an attempt is made to take all of these variables into account, the projection quickly becomes unwieldy, and conventional approaches therefore tend to rely on a simplified, broad-based approach.
It is an object of the invention to provide a method of financial planning which can give a subject a relatively detailed and in-depth assessment of his or her financial future, and which allows the effect of various alternatives to be considered.